2 Cents on The Facebook Scandal

We’ve all seen it hit the news wire and the storylines are too strong not to thumb through. Theongoing Cambridge Analytica data privacy scandal is heavy right now. Facebook, the heralded media giant is being accused of severe data and privacy negligence. Not just the Trump election stuff, but now apparently it has been stated rumoured by “The Whistleblower” that Facebook acquires third party user targeting data based on what you say in private phone calls. With all of these stories, it has been published that brands are moving away from the advertising platform that they had shifted a substantial portion of their media budget to over the last 3-5 years.

We want to weigh in on the topic and provide our thoughts.

“I’m deleting my Facebook account!”

We definitely understand people saying they may make a change to how they use the platform and so they should. Our usage of social media channels should be adapted to evolve with our preferences, likes, interests etc. Social Media should be a part of our lives, not our lives entirely. Let’s be clear, “making a change to how they use Facebook” is not the same as abandoning it. We think the media has turned this specific topic of channel abandonment by users into a bit of an overreaction. We call your bluff. You’ll stick around and we believe Zuckerberg will make you a loyal fan once again!

“We’re pulling our advertising dollars out”

First, let’s get some facts straight… Partner Categories is not what allowed Cambridge Analytica to access as many as 50 million Facebook profiles. The data mining firm was given that data from a third-party app developer in violation of Facebook’s terms of service and without user permission.

Partner Categories?? - Facebook targets ads to audiences created through one of three ways:

Interests and demographic data that users voluntarily seed their profiles with

Datathat brands have been granted access to through opt in action (i.e. website visitors,email addresses etc.)

Partner Categories which are data aggregators like Experian. They gather together purchasing history and other valuable information to make ad targeting more effective. For Canadian advertisors, this isn't much of an issue as Partner Categories are not available for use in Canada. As part of Partner Categories, Facebook shares revenue with companies like Experian that help inform its data set every time a marketer purchases ad space on Facebook using that data. While this is not necessarily an inherently abusive practice, Facebook clearly views its existence as a potential threat in the waiting, and the company is taking seemingly ever preemptive measure it can right now to fend off future privacy violations and PR disasters like the Cambridge Analytica one.

We do acknowledge that some big brands (i.e. Tesla, Playboy etc.) are pulling out but we believe that for the most part, Facebook will continue to be a vital component of most brand’s (who advertise online) digital marketing mix. This whole thing will force Facebook to tighten up once again and continue on with a vengeance. Their #1 priority is creating great user experience and we believe that will be evident once again, and soon.

This scandal has triggered Facebook to act on mitigating and eliminating a privacy risk they knew may have been bubbling. Facebook announced yesterday that they are disabling a form of advertising targeting (Partner Categories), which allowed prominent third-party data aggregators like Experian and Acxiom to provide clients with offline data like purchasing activity to inform ad targeting. Check it out here

Final Thought:

Ever since the IPO, the media has slammed FB, but it has only made them stronger in our opinion. Considering this was a third party integration that sold the data and not FB itself we imagine this will cause them to tighten up their allowances of third party APIs as we know they are already doing but also tighten up in other areas to continue to improve the user experience and privacy. We will see what those areas are in upcoming announcements by Facebook.

Really, it’s too early to say how it will play out but the gut says it’s a temporary blip that could have the potential to even out the inflated auction if more big brands pull out. This means small brands might have a short period advantage in the ad platform. It will be good to hedge our bets and be exposed into some other platforms though. We just set up another YouTube campaign today and while their targeting interface is painful it can be quite accurate. Essentially Google search capabilities with video content.

It’s a perfect time to try out some other ad platforms and capture attention elsewhere but don’t EVER sleep on Facebook. This will pass and it’s really no biggie in our opinion.

If you want to discuss more, let’s jump on a call or you can shoot us an email!